Governor Wolf’s 2019-2020 Budget: A First Take

Marc Stier |

Governor Wolf’s 2019-2020 budget proposal reflects the unique political moment in which it is presented. Pennsylvania is a state poised between two visions of government in Pennsylvania. The governor’s budget points to the future being born. But the budget is constrained by another vision that is not dying as quickly as we would like.

The governor’s budget, like the budgets of his successful first administration, points the way to our future—a future in which Pennsylvanians act together to create inclusive prosperity that allows everyone, no matter their race, class, gender or where they live in the state to live a life of dignity, prosperity, and opportunity. However, until the General Assembly reflects the changing priorities of Pennsylvanians, which includes support for proposals that generate new revenues from the very rich and corporations, the state budget will not invest sufficiently in education at all levels, health care, infrastructure, and protecting our environment.

In the areas of wages, education, workplace development, and corporate tax reform, the governor’s budget takes important steps for Pennsylvanians and points the way to the future most Pennsylvanians want.

By proposing a significant increase in the minimum wage, his budget points the way to a future in which wages and benefits, and thus living standards, rise for all, driving our economy forward as people gain the means to purchase the goods and services that enable them to live increasingly comfortable lives.

  • The governor proposes to immediately increase the minimum wage to $12, with 50-cent increments to $15 by 2025, and cost of living increases thereafter, which would benefit over 2.2 million Pennsylvania workers. It will lift tens of thousands of people out of poverty and inject billions of dollars in new consumer spending into local economies throughout the state. And it will reduce state spending for Medicaid and other safety net benefits. Combined with new personal income and sales tax revenues this will contribute an estimated $36 million to the state budget in 2019-2020 and $120 million in 2020-2021, even after accounting for increased wages for child care and direct care workers. The governor also proposes to end the tipped minimum wage which is responsible for both higher rates of poverty and sexual harassment in the service industry. And he proposes to put more state effort into enforcing the minimum wage by reducing wage theft.

By including new funding for K-12, pre-K, higher education, and workforce training, the governor’s budget points us towards a future in which we invest much more in education at all levels and in workforce training, making Pennsylvania’s workers and the businesses who hire them the most productive in the world.

  • K-12 Education: After adding $1 billion in funding for K-12 schools in his first term, the governor calls for increases of $200 million in Basic Education and $50 million in Special Education funding. At a time when it is becoming hard to find qualified teachers, the governor proposes to raise the minimum starting salary for Pennsylvania teachers from $18,500 to $45,000. He also plans to extend schooling for many young Pennsylvanians by both lowering the compulsory age of school attendance from 8 to 6 and raising the drop-out age from 17 to 18.
  • Pre-K: After increases in pre-K funding by $115 million over the last four years, the governor proposes another $50 million investment next year. This will enable an additional 5,550 children to enroll in high-quality early learning programs and put the state more firmly on the path to free, universal pre-K education.
    Higher Education: Governor Wolf includes a $7 million increase in funding (1.5%) for the 14 colleges in the Pennsylvania System of Higher Education (PASSHE) after a slightly larger increase last year. The budget also includes $8 million in community college tuition assistance.
  • Workforce Training: By executive order, the governor has created a workforce command center under the Statewide Workforce Education and Accountability Program (SWEAP) which will coordinate the variety of programs that provide workforce training to enable employees and potential employees to develop the skills that Pennsylvania’s employers seek. He also proposes to build on his major initiative in workforce development and training last year with an additional $4 million to double the investment in the PA Manufacturing to Career Training Grant Program and $6 million in additional funding of adult career and technical education training programs. The budget also includes $12 million for the Employer Skills Fund, a public-private partnership that will provide grants to businesses to develop innovative solutions to raise skill levels.

By presenting an innovative plan to use debt repaid by a new shale tax to fund infrastructure, the governor’s budget points us toward a future in which the state invests in the infrastructure that both protects us and supports thriving communities and expanding businesses.

The governor proposes a shale tax, that is, a severance on natural gas drilling and calls for using the revenues generated by the tax to pay back $4.5 billion in bonds that would be sold over the next few years. The proceeds from the bond sales will be used to fund major infrastructure improvements such as broadband expansion, flood prevention, and urban blight remediation that would set the stage for new investment in our cities and towns, including public transit. (We would add a few items to the list of investments that should be supported with these funds, including investments in commercial corridor improvements in our cities and towns and the development of community colleges in under-served areas of the state.)

And by calling for corporate tax reform that finally closes the Delaware loophole, his budget points to a future in which everyone—including the rich and multi-national corporations—pay their fair share of taxes, which generates the revenues we need for these public investments.

These are all important steps forward. But, while Governor Wolf’s budget points to a future in which the state government does far more than it does today to build a growing economy based on a rising standard of living for all Pennsylvanians, the aspirations evident in the governor’s proposals are constrained by the need to put forward budget proposals that can win the support of legislators who have a very different view of the role of government. Thus, in many areas the budget proposed by the governor is austere. We have advanced spending proposals for education, higher education, health care, environmental protection, and transportation infrastructure that are far bolder than those found in the proposed budget. And we have called for them to be paid for by a Fair Share tax that would cut taxes on working people and the middle class and raise them on the richest Pennsylvanians.

At a time when Pennsylvania government remains divided between two starkly different visions of the role of government, Governor Wolf has proposed a budget that moves as far as possible towards our vision of government while also making the first task of government, actually enacting a budget and the revenues to pay for it, possible. We urge the Republicans who lead the House and Senate to also recognize the practical and moral necessities of governing and enact this budget.